IBISWorld believes Woolworths will continue to gain market share to the point of 37.2 per cent by the end of 2017-18.

“As a result of the resurgence of Woolworths’ supermarket business, the company gained market share for the first time in several years in 2016-17,” IBISWorld Senior Industry Analyst, Nathan Cloutman said.

“This trend is expected to continue in 2017-18, with the company projected to account for 37.2 per cent of the industry by the end of 2017-18.”

According to IBISWorld, independent Metcash supermarkets are continuing to suffer from Woolworths, Coles and Aldi’s focus on competing with price.

“The price war between Woolworths and Coles, and the expansion of ALDI are putting pressure on smaller retailers,” Cloutman said.

Although Amazon is yet to sell fresh food items in Australia, the threat of an AmazonFresh entry is making online grocery sales increasingly important for the industry.

Revenue in the online grocery sales industry is forecast to grow at an annualised 12.4 per cent over the next five years.